GLOBAL MARKETS-Stocks rise on data, central bank hope; dollar up

Thu Feb 28, 2013 3:09pm EST

* Dollar up on Italy deadlock and U.S. spending cuts

* European shares gain on confidence in central bank support

* U.S. factory, jobless claims help lift sentiment

NEW YORK, Feb 28 (Reuters) - Global stock markets rose on Thursday, boosted by encouraging U.S. economic data and renewed confidence that major central banks will keep taking steps to support their economies, while the dollar gained against the euro.

The political stalemate in Italy, along with looming U.S. federal budget cuts, spurred the dollar's gains.

A drop in new U.S. claims for jobless benefits last week and a sharp rise in factory activity in the Midwest in February added to recent data that suggests the U.S. economy is improving.

The U.S. Commerce Department said gross domestic product rose 0.1 percent in the fourth quarter - reversing a previous reading showing a contraction, but less than the 0.5 percent gain forecast by analysts in a Reuters poll.

Investors, however, largely shrugged off the anemic economic growth of the fourth quarter to focus on a brighter picture in the future.

"The jobless claims continue to show further signs of improvement in the labor market. It's encouraging," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co LLC in New York.

"We knew that it was a bad quarter, and we knew that there was a confluence of negative inputs such as from government inventories," he said of the fourth-quarter GDP. "We don't expect this to continue in 2013."

The Dow Jones industrial average was up 24.58 points, or 0.17 percent, at 14,099.95. The Standard & Poor's 500 Index was up 4.38 points, or 0.29 percent, at 1,520.37. The Nasdaq Composite Index was up 9.39 points, or 0.30 percent, at 3,171.65.

The Dow earlier touched 14,143.84, within 60 points of its record intraday high.

The U.S. stock market lacks catalysts as it digests its recent move higher, according to Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey, where he helps oversee $120 billion in assets under management.

"That's why I think you're seeing a fairly listless trading environment today," Caron said.

MSCI's all-country world equity index rose 0.5 percent, while in Europe, the FTSEurofirst 300 index of top regional shares rose 0.9 percent to close at 1,171.47.

The dollar rose against the euro as investors embraced its perceived safety against the backdrop of the Italian stalemate and less than 24 hours before automatic federal spending cuts start taking effect in the United States.

The euro last traded at $1.3084, down 0.4 percent on the day.

The euro's upside is seen as limited by concerns that political instability will stall Italian economic reforms and reignite the euro-zone debt crisis.

U.S. CRUDE ENDS DOWN

In oil markets, U.S. oil for April delivery slipped 71 cents to $92.05 a barrel.

Gold headed toward its longest run of monthly declines in more than 16 years as an improved economic outlook and reduced concerns about inflation blunted its appeal to investors.

Spot gold fell 0.6 percent to $1,587.66 per ounce, on course for a monthly drop of about 4 percent. The precious metal has been in the red for five straight months - the longest such losing streak since late 1996 to early 1997.

U.S. Treasuries rose as the potentially growth-damping impact of prospective U.S. government spending cuts fed the bid for safe-haven U.S. debt.

The benchmark 10-year U.S. Treasury note gained 3/32 in price to yield 1.8894 percent.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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